What is Shared Ownership Scheme? It is a buying scheme that allows buying a share of the desired property and then paying rent to a landlord on the rest of its value.
Typically, buyers opt for the shared ownership scheme when they cannot afford a deposit combined with mortgage repayments for a desired home.
Shared Ownership Eligibility
Requirements, perks, and rules for the scheme differ across the regions, but there are several common guidelines:
- The scheme allows buying a share between 10% and 75% of the property market value.
- A buyer pays the rent on the rest of the property value to the landlord.
- Buyers also often pay ground rent and service charges (maintenance, community areas, etc.)
Shared Ownership Property Requirements
Not all property across the UK, including London, is suitable for buying via shared ownership. These are the main requirements:
- It can be a new-build home.
- It can be an existing property via the shared ownership resale scheme.
- It can be a home suited for a specific need, for instance, buyers with long-term disabilities.
- Most importantly, note that Shared Ownership homes are offered by housing associations, developers, local councils, and similar organisations. These are the providers or the landlords to whom rent is paid.
Also, all shared ownership homes are leasehold properties.
Buying Your Property Share
Typically, Shared Ownership means buying between 25% and 75% of the property value. However, several properties offer 10% ownership.
Buyers can take a mortgage to buy this share or pay with savings. Note that it is required to pay a deposit (5%-10%) on the share you are going to buy.
Unsurprisingly, the scheme allows buying more property shares in the future, known as staircasing. Put simply, owning more means paying less rent as its amount depends on the landlord's share.
Shared Ownership Application Requirements
There are several eligibility requirements for buyers interested in Shared Ownership properties.
Both of the following have to be true:
- Your total household income is below £80k per year (£90k in London).
- You cannot afford a deposit and a full mortgage on a home that meets our needs.
In addition, one of the following should apply:
- You are a first-time property buyer (FTB).
- You are currently forming a new household.
- You own a shared ownership property and wish to move.
- You own a home and want to move, but you cannot afford a desired property.
Note that some Shared Ownership properties imply that you need to live or work in the area (or have some connection to it) where you are buying a home.
Shared Ownership Explained Step-by-Step
The process of buying a new Shared Ownership home in London typically goes like this:
- Research available shared ownership properties in London and check your eligibility.
- Reach out to the developer and apply for a shared ownership property.
- Secure a mortgage and deposit with a lender approved by the scheme.
- Complete the legal processes with solicitors (typically provided by the developers) and pay associated fees, including stamp duty (if applicable).
- Move into the new property and pay rent on the remaining property share while having the option to buy more shares in the future.
Shared ownership homes in London
All Shared ownership properties for sale →
Frequently Asked Questions
1newhomes allows a quick and efficient search for shared ownership homes in London. Select the filters and get a tailored selection of new builds available via this scheme.
Yes, it is possible to sell your shared ownership home at any time. If you own less than 100%, you need to inform the landlord, and he will find a buyer within a specified time (set out in the lease). You can then sell the share on the open market in case the landlord cannot find a buyer.
Owning 100% allows selling a shared ownership home at any time on the open market.
The scheme works similarly in London and across the UK, but there are subtle differences. For instance, the maximum annual household income requirement for shared ownership properties in London is £90k instead of £80k.
Also, new builds in London are more expensive, meaning shared ownership homes will also require higher deposits, mortgage payments and rents. In addition, these homes are typically provided by housing associations specialising in affordable houses, and they may have various extra policies and procedures.